Lenovo Group beat expectations with net profit rising 36% to USD220 million in its fiscal second quarter. Lenovo said it expects to sell 50 million smartphones this year, more than double last year’s 20 million. It also said it expects to sell 10 million tablet computers this year, 10 times more than a year ago, Chairman and Chief Executive Yang Yuanqing said. Revenue was USD9.8 billion, a 13% increase year-on-year. “We have achieved record revenue and record profit, and improved profitability significantly,” Yang said. “The PC market is recovering, and tablet growth continues shifting to mainstream and entry-level devices,” he added.  By the end of the fiscal second quarter, Lenovo remained the world’s largest PC vendor ahead of Hewlett-Packard and Dell, with its highest-ever quarterly market share of 17.7%, up 2 percentage points from a year ago, according to International Data Corp (IDC). Lenovo’s PC shipments during its second fiscal quarter reached 14.1 million units, growing the fastest among the world’s top five PC makers. Booming laptop sales contributed half of the company’s revenue. Revenue from Lenovo’s Mobile Internet and Digital Home business, including smartphones, smart TVs and tablets, contributed 15% of total revenues in the fiscal quarter, up from 8% one year ago and 4% two years ago. In its fiscal second quarter, smartphone sales jumped 78% year-on-year, the Shanghai Daily reports. Lenovo plans to sell smartphones in 20 more markets over the next few quarters and increase media tablet sales worldwide through existing computer channels. Lenovo posted a record high 2.3 million global tablet shipments last quarter, which made it one of the industry leaders. Yang said Lenovo’s goal was to raise the contribution of smartphones and tablets to total revenue to about 50%. “We expect the fiscal third quarter to December to see solid quarter-on-quarter growth on the back of a high seasonal effect and new model launches,” Barclays Analyst Kirk Yang said.

Xiaomi Technology, the Chinese maker of cheap iPhone lookalikes that is reaching offshore for the first time, will find it tougher to establish a customer base in Taiwan than at home, analysts say. Beijing-based Xiaomi, founded just three years ago, has become China’s fifth-most popular smartphone brand, with 7.19 million units sold last year. It began selling its handsets in Taiwan about six months ago. Taiwanese customers will be harder to please as they normally stick with older, trusted brands, consumer electronics analysts say. Some look down on mainland products because of perceptions of poor quality and Xiaomi’s fate in Taiwan is expected to offer clues about how well the brand might sell in other offshore markets. “I think there’s some audience that’s interested in Xiaomi’s offering, but definitely that group is not as big as the same audience in China,” said C.K. Lu, Smartphone Analyst with market researcher Gartner. “In Taiwan, brand is the concern, and not everyone knows Xiaomi, or it’s not the brand everyone trusts.” Its Android smartphones, which sell for as little as USD320 on the mainland, eating into the market share of rivals Lenovo and ZTE, would attract cost-conscious Taiwanese consumers who liked to customize their phones, Lu said. Analysts expect Xiaomi will build up a following among poorer Taiwanese and eventually in emerging markets beyond Greater China but to receive less enthusiasm elsewhere. “Xiaomi has limited distribution channels outside China, its smartphone designs are not yet significantly different from most other Android competitors, and the Xiaomi brand is hard for Western consumers to pronounce, spell or remember,” said Neil Mawston, Wireless Device Executive Director at Strategy Analytics in Britain. Xiaomi has been offering phones through Taiwan’s No 3 mobile carrier, Far EasTone Telecommunications, which gives them out free of charge with new service accounts. Far EasTone would not disclose figures for Xiaomi, but a company publicist called sales “feverish”. Chinese media say Xiaomi has targeted Brazil, India and Russia for future sales growth.

Zhong An Online Property Insurance, China’s first online insurance firm, plans to roll out its first products by the end of the year. The new venture is a three-way tie-up between Ping An Insurance, Tencent and Alibaba. The partners would address the risks of online shopping and design “innovative products” to solve these problems, said Chief Executive Yin Hai at the company’s launch ceremony in Shanghai. Alibaba is the largest shareholder of Zhong An with a 19.9% stake. Tencent and Ping An each own 15%, while online travel agency Ctrip owns 5%. The balance is spread among a number of other shareholders. Jack Ma, Chairman of Alibaba, said the most important task for Zhong An was to build a database that could be leveraged by all kinds of companies in the future. Headquartered in Shanghai, the insurer has a registered capital of CNY1 billion. Yin said the company would provide products for internet enterprises and individuals. Zhong An’s product portfolio would range from enterprise property insurance to cargo transportation insurance and exchange rate insurance “but all these businesses must be related to internet transactions”, he said. Online transactions by individuals usually involved small payments, on average just several hundred yuan, he added. As a result, the firm’s insurance products will be quite cheap.

Competition is increasing among China’s top three search engines. For the moment, Baidu remains the top player. Online security software developer Qihoo 360, which launched its search engine www.so.com in August last year, is winning users from Baidu, and claimed it commanded a 20% market share of web-page searches in October. In September, Tencent teamed up with Sogou, a subsidiary of internet portal Sohu, to bolster its presence in the search market. Tencent invested USD448 million for a 36.5% stake in Sogou, and merged its Soso search engine and QQ Chinese input system with Sogou. The tie-up between the two increases the competition with the top two providers Baidu and Qihoo 360. The search engine business is an important battlefield because search services are mature products generating advertising income. Nasdaq-listed Baidu, whose core business is selling advertisements online, posted a year-on-year rise in revenue of 42.3% to CNY8.9 billion in the third quarter of this year. As the market leader, it commanded 63% of market share in September, according to internet data provider CNZZ. Next in line were Qihoo 360 with 19%, and Sogou with 10.4%. Tencent’s Soso was ranked fourth with a 4% market share.

Skype, the instant messaging and online voice-and-video-call service owned by Microsoft, will be relaunched in China under a new joint venture, following the end of a long-standing alliance in the market with Tom Group. Tom informed Skype users that Microsoft took over the online business with effect from November 24. “In China, Skype software is made available through a partnership to comply with established procedures to meet obligations under local laws,” Judd Harcombe, Manager of global market development at Skype said. “We are committed to making the transition seamless for our users and look forward to Tom’s continued assistance,” she added. Microsoft acquired Skype for USD8.5 billion on May 2011 and initially ran the service as a separate division. A sweeping reorganization by Microsoft in July has since put Skype under the company’s applications and services group, led by Shanghai-born Executive Vice President Lu Qi. Ricky Lai, Research Analyst at Guotai Junan International, said Skype under a new joint venture “would still find it tough to compete on the mainland against Tencent’s popular platforms QQ and WeChat and those of other local players”. Efforts by Skype to expand its online voice-and-video-call service in China have been hampered by tight industry regulation.